Department of Education v. California
604 U.S. 650 (2025)
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Rule of Law:
A federal court's jurisdiction to order payment of money under the Administrative Procedure Act (APA) is limited; the APA's sovereign immunity waiver does not extend to claims seeking 'money damages' or to enforce a contractual obligation to pay money, which falls under the Tucker Act.
Facts:
- Congress established the Teacher Quality Partnership (TQP) and Supporting Effective Educator Development (SEED) programs to award grants for teacher training and education-related services, with TQP grants for five years and SEED grants for up to three to five years.
- On February 5, 2025, the Acting Secretary of Education issued an internal directive for Department personnel to review 'issued grants' to ensure they do not fund 'discriminatory practices' including 'diversity, equity, and inclusion ("DEI")' initiatives, or involve 'fraud, abuse, and duplication.'
- Two days later, TQP and SEED grant recipients, including public schools and universities in California and other states, began receiving identical letters from the Department announcing the termination of their grant awards.
- These termination letters provided a general, disjunctive list of potential justifications, such as funding DEI initiatives, violating civil rights law, conflicting with Department policy prioritizing merit, or failing to serve U.S. interests, without specifying the reason for any particular grant's termination.
- Grant recipients did not receive pretermination notice or an opportunity to be heard or cure any alleged noncompliance before the terminations were issued.
Procedural Posture:
- Eight states sued the Department of Education in the United States District Court for the District of Massachusetts, alleging that the mass termination of TQP and SEED grants violated the Administrative Procedure Act (APA).
- The District Court issued a temporary restraining order (TRO) on March 10, 2025, enjoining the Government from terminating grants and requiring it to pay past-due and accruing obligations, finding respondents likely to succeed on their APA claims.
- The District Court subsequently construed the states' TRO motion as a motion for a preliminary injunction and set it for a hearing.
- The District Court extended the TRO for an additional 14 days, until April 7, 2025.
- The Government requested a stay of the TRO from the District Court, which was denied.
- The Government appealed to the United States Court of Appeals for the First Circuit and requested a stay, which a unanimous panel denied.
- The Government filed an application with the Supreme Court to vacate the District Court's order and requested an immediate administrative stay.
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Issue:
Does a federal district court’s order, styled as a temporary restraining order but possessing characteristics of a preliminary injunction and ordering the government to pay out past-due grant obligations, constitute an appealable preliminary injunction for which a stay is warranted, given the limitations of the Administrative Procedure Act's waiver of sovereign immunity?
Opinions:
Majority - Per Curiam
Yes, a federal district court's order, styled as a temporary restraining order but possessing characteristics of a preliminary injunction and ordering the government to pay out past-due grant obligations, constitutes an appealable preliminary injunction for which a stay is warranted due to the limited scope of the Administrative Procedure Act's sovereign immunity waiver. The Court construes the District Court's order as an appealable preliminary injunction because it carries many hallmarks of such an injunction, consistent with precedents like Sampson v. Murray and Abbott v. Perez. The Government is likely to succeed on the merits, demonstrating that the District Court lacked jurisdiction under the APA to order the payment of money. The APA's waiver of sovereign immunity explicitly does not apply to claims seeking 'money damages' or to enforce a 'contractual obligation to pay money,' as established in Great-West Life & Annuity Ins. Co. v. Knudson. Such claims typically fall under the Tucker Act, which grants jurisdiction to the Court of Federal Claims. Regarding the stay factors, the Government convincingly argued that it is unlikely to recover disbursed grant funds, especially since no grantee promised to return them and no bond was imposed. Conversely, respondents would not suffer irreparable harm, as they have the financial capacity to maintain programs and could recover funds in an appropriate forum if they ultimately prevail. Any harm from declining to keep programs running would be self-imposed.
Dissenting - Justice Kagan
No, the emergency application for a stay should be denied because the Court's reasoning is under-developed and possibly wrong, particularly regarding the proper forum for this dispute and the assertion of irreparable harm. The Government failed to defend the legality of canceling the education grants, focusing instead on jurisdictional issues. Contrary to the per curiam opinion, the respondent States consistently represented that the loss of grants would force them to curtail teacher training programs, indicating irreparable harm. The general rule is that APA actions, even those potentially resulting in fund disbursement, belong in district courts, as held in Bowen v. Massachusetts. The majority's reliance on Great-West Life & Annuity Ins. Co. v. Knudson is misplaced because Great-West was not an APA case. Deciding such a complex issue on an emergency docket with barebones briefing and no argument increases the risk of error, and there was no urgency demanding immediate intervention.
Dissenting - Justice Jackson
No, the application should have been swiftly denied for numerous independent reasons, primarily because the Supreme Court lacks jurisdiction over this interlocutory temporary restraining order, and no exigency warrants emergency relief. Ordinarily, TROs are not appealable unless 'potentially unlimited' in duration or causing 'serious, perhaps irreparable, consequence,' neither of which applies to this time-limited TRO that merely restores the status quo. The TRO also explicitly permits individual grant terminations consistent with law. Furthermore, the Government failed to demonstrate the exigency required for emergency relief, as the TRO was set to expire imminently, and its assertions of harm were speculative and not irreparable (e.g., no evidence of a rush to draw funds, periodic draw-down requests, and government mechanisms for recoupment). Most significantly, the Government did not even attempt to defend the lawfulness of its grant termination policy against the Plaintiff States' arbitrary and capricious claims under the APA. The Department's mass termination with boilerplate letters and lack of due process likely violated APA standards, making the lower courts' assessment of likely unlawfulness reasonable. The balance of equities clearly favors the Plaintiff States, who face concrete harms like employee firings and program cancellations, directly contradicting Congressional goals for the grant programs.
Analysis:
This case highlights the Supreme Court's growing use of its 'shadow docket' for substantive decisions without full briefing or oral argument, drawing criticism from dissenting justices. The majority's decision narrows the scope of the APA's sovereign immunity waiver, reinforcing that claims for contractual payment obligations against the government must typically be brought under the Tucker Act in the Court of Federal Claims, even if framed as an APA challenge. It also provides guidance on when a TRO, though temporary, may be reclassified as an appealable preliminary injunction, signaling increased appellate scrutiny of such orders, particularly when they involve significant governmental financial obligations.
